Sri Mahantesh vs. The State Of Karnataka

Facts

The petitioner, Sri. Mahantesh, participated in a tender process initiated by Respondent No. 3, the Executive Engineer, Public Works Department, for civil works. The original tender notification dated 15.11.2018, stipulated in Condition No. 10 that GST would be paid separately on the contract amount as per a Government order dated 10.10.2018. The petitioner was the successful bidder and received a letter of intent on 14.02.2019, for which he provided a bank guarantee of Rs. 6,26,310/-. Subsequently, Respondent No. 3 issued a corrigendum dated 25.01.2019, amending Condition No. 10 to withdraw the separate GST payment requirement. The petitioner made a representation on 03.05.2019, requesting the retraction of the corrigendum and adherence to the original condition. Instead of addressing the representation, Respondent No. 3 forfeited the petitioner's earnest money deposit (EMD), alleging non-performance.

Held

The Court held that the original tender notification dated 15.11.2018, clearly mandated separate payment of GST on the contract amount as per the Government order dated 10.10.2018. The petitioner, having accepted this condition, participated in the tender and became the successful bidder. Therefore, the decision of Respondent No. 3 to issue a corrigendum withdrawing this condition was considered an error. The Court found that the petitioner had not violated any terms specified in the tender notification. Consequently, Respondent No. 3's action in forfeiting the petitioner's EMD was deemed arbitrary and discriminatory. The Court allowed the writ petition and directed Respondent No. 3 to refund the earnest money deposit to the petitioner within three months of receiving a certified copy of the order.

Key Issues

1. Whether the corrigendum notification dated 25.01.2019, issued by Respondent No. 3, which withdrew the condition for separate GST payment on the contract amount, is arbitrary and discriminatory, thereby vitiating the subsequent forfeiture of the petitioner's earnest money deposit (EMD)? Petitioner's arguments: The petitioner contended that the original tender notification clearly stipulated separate payment of GST as per the Government order dated 10.10.2018. Having participated and emerged as the successful bidder based on this condition, the subsequent withdrawal of this condition through a corrigendum was arbitrary and discriminatory. The petitioner argued that he had not violated any terms of the original tender notification and that the forfeiture of his EMD was unjustified. The petitioner relied on the initial tender conditions and his representation dated 03.05.2019. Revenue's arguments: The judgment records that the arguments of the learned AGA for the State were duly considered, but does not detail specific arguments made by the State.